Get with the programme

In the first of two reports about partner schemes, we consider how some of the leading vendors are refreshing their approaches

Points make prizes was the catchphrase of a TV game show that was, sadly, much loved by the UK's viewing public. Few of us care what it really meant, but bizarrely the arrival of points schemes into partner programmes is breathing new life into the phrase after years of misuse.

It's just the latest example of how vendors are seeking to revitalise their systems to give an incentive to the channel and another aspect of the ever-shifting rules that underpin partner programmes.

Clearly, the goal of a good programme is to be successful for both the vendor and partner. In a growing market vendors hope to attract new resellers from competitor schemes with new 'super improved' programmes. This may go some way to explaining why programmes change so frequently.

But aside from the constant tweaks, the partner programme is the glue that keeps the relationship going. Changes to a programme can spark rows, or worse still, mass defections. On the upside, a well-tuned programme can keep resellers happy and profitable, while growing the market share of the vendor.

There are basic essentials that tend to appear in any self-respecting programme. Some form of naming for different grades of reseller, a discounting system linked to level of sales, a rebate and/or bonus system, training, certification and accreditation, finance for marketing, and tools for communications.

Usually the most controversial aspects of programme are the conditions that reward sales. There has been thousands of column inches of argument and counter-argument in CRN about rebate programmes, discount schemes and points systems. Here's a look at approaches from five different vendors.

Microsoft has 80,000 partners worldwide, and more than 16,000 partners in the UK. Partners are split into three categories, which are listed here in order of increasing status under the Microsoft Partner Programme: Registered (14,000); Certified (2,300); and Gold (290).

The emphasis is on points and what Microsoft calls 'community', which is a mix of promoting tools for partners to communicate together and with Microsoft, as well as events where particular needs can be addressed. Its aim is to build 'competencies' in 11 skill areas, nine of which are currently available.

Microsoft allocates an undisclosed sum to supporting partners with a range of co-marketing resources. Microsoft says its co-marketing budget is increasing and that in some instances it provides funding for PR and design agency work. This is a programme that will be expanded next year.

The latest innovation is 'Partner Points', which can be accrued based on technical depth and business expertise. This rewards partners as they move up the tier system. The partner portal provides a 'points calculator' to assist in planning steps in the programme.

Most of Microsoft's business is through the channel, while large accounts are dealt with jointly by Microsoft account managers in association with designated Large Account Resellers (LARs), such as Computacenter and TrustMarque Solutions.

In the US, Microsoft has begun an innovative 'Buddy Programme' for partners, which gives some partners a direct link to a Microsoft 'buddy' staffer. Unfortunately the programme is only in pilot and may not even see the light of day over here.

Gold Partners are entitled to a higher level of support directly from Microsoft consultants. For example, they develop business plans in collaboration and route-to-market plans for their product and service offerings, or develop new business pitches.

According to Natalie Johnston, group manager partner development and marketing at Microsoft, the points system is designed to simplify matters. "We think it adds clarity to the process of obtaining status as a partner. There were a few hiccups with the initial registration process, but otherwise the feedback has been good," she says.

Johnston adds that the UK equivalent of the 'buddy' system is 'community events' and 'one to few' workshops on specific topics.

Bob Tarzey, services director at analyst Quocirca, says: "Comparing the IBM and Microsoft points systems is tricky, but one IBM point seems to have the value of about six Microsoft points. It would be nice if they were transferable between vendors, but so far they are not."

IBM's PartnerWorld Programme, which consists of 90,000 partners worldwide, offers sales and marketing tools, skill-building courses, technical support and tools built around three categories: consultant and integrator, ISV and reseller.

The programme was unified in April to create a simple incentive and support model for all categories. Partners had previously enrolled in one or more of IBM's Systems and Services, Software, Personal Systems and Developers' tracks, each of which had their own criteria and benefits. Now there is only one track.

Resources range from education and certification, tools to drive demand, marketing and sales assistance, technical support and access to IBM technology.

Like Microsoft, IBM has three levels of membership. PartnerWorld consists of three levels: Member, Advanced and Premier. Member level requires minimal entry-level commitment, and in return IBM provides electronic support covering a broad portfolio of IBM products.

Advanced and Premier levels reward partners that make strong commitments to IBM products and technologies with demonstrated skills, solutions or revenue achievement. IBM provides them with an enhanced level of skills development and marketing and sales support.

To progress to the Advanced or Premier levels of PartnerWorld membership, business partners earn points by developing skills, driving IBM revenue and achieving customer satisfaction targets.

To earn points for skills, a certification validates an individual's skills, knowledge and experience. Partners are also awarded points for achieving sales targets. Consultants and integrators, which influence the sale of IBM products, can also be awarded points in recognition of their contribution.

IBM has a restructured rebate scheme called Reseller Advantage Programme (RAP) for business partners. RAP allows them to increase potential reward from IBM by up to 70 per cent. It incorporates printers and xSeries products alongside PC products.

A key feature of the current programme is building depth of knowledge so the channel can sell across IBM's portfolio. This is embodied in its online programme, Know Your IBM, a skills and sales incentive course now being rolled out across Europe.

Mike Bernard, manager of channels marketing, IBM northern EMEA, says the principles behind the programme are basic. "It's based on the principle of keeping it simple and stable. The channel doesn't like chopping and changing," he says.

James Governor, principal analyst at consultant RedMonk, is impressed with IBM's partner push.

"IBM is definitely making a big push for SMEs with its recent announcements. It has a kind of a buddy programme like the one being trialled by Microsoft in the US, so it will be interesting to see how that develops," he says.

Hewlett-Packard (HP) currently has 8,500 UK partners registered, of which 4,000 regularly buy from distribution partners. Partners are active across each of the product lines: Imaging and Printing, Personal Systems, Enterprise Servers and Storage and Services business.

PartnerOne is HP's Global Partner framework, which was created at the end of 2002. The recent changes to PartnerOne are in accreditation, enterprise sales, and planning framework times. For accreditation HP is reducing overlap and introducing web learning and online certification.

PartnerOne has three levels of membership: Premier, Select and Business Partner. These are reviewed every six months giving HP "the opportunity to assess partner's ability to meet the criteria for the programme level they are at".

HP's main generalist distributors are Computer 2000, CCD Distribution, ETC, Interchange, Ingram Micro, and West Coast. Its enterprise disties are Ideal, Magirus, Metrologie and OpenPSL.

Below the Business Partner space HP develops business opportunities through an Authorised reseller scheme. In the UK there are 800 resellers registered.

HP, perhaps more than any of the other vendors, has received criticism of late over its commitment to the channel. At its recent EMEA Enterprise Partner Conference, Jos Brenkel, general manager at HP's solutions partner organisation EMEA, said: "Our big concern is that resellers are not hunting enough new business."

Brenkel added that the programme will evolve over the next 12 months to better reward resellers that find new business; he said a finders' fee will be part of the incentive. HP also intends to put more funds behind promoting sales of a portfolio of products to promote upselling and cross-selling.

It also intends to push more sales through the TopConfig programme. This allows customers to order through the channel and then receive a direct shipment built to order with a customised price.

EMC divides its channel into resellers, partners, and premier partners. The firm unveiled its 'Velocity Partner Programme' to EMEA in October 2003. This gives incentives to resellers and integrators which sell, install and support storage-related solutions to invest in EMC certification and training.

Classified according to skills-based qualifications, such as the number of EMC-certified personnel and revenue performance, Velocity partners are rewarded with improved co-operative funding, EMC technology rebates, enhanced sales programmes, training and marketing support. Prizes are available for sales people.

The Velocity Programme classifications are EMC Velocity Reseller, EMC Velocity Partner and EMC Premier Velocity Partner. EMC has 37 partners and five OEM partners which all rebadge products from Dell, Fujitsu Siemens, Unisys, Bull and Fujitsu.

Torsten Svensson, EMC's channel and partner sales director EMEA, says: "Velocity is a skills-based programme with the aim of better equipping our partners to compete in the EMEA storage market.

"We recognise that partners with the best sales, engineering and professional services skills will best address new and under-served market segments. We reciprocate the commitment of organisations that invest in their relationship with EMC."

Alongside the programme that began last month with a Clariion sales target performance-based goal, EMC introduced what it calls the 'Channel Express' online configuration, price, quote and order system.

According to Colm O'Neill, partner sales manager UK & Ireland at EMC, the programme is growing fast. "There is a waiting list to join. We feel like we are going in the opposite direction to the traffic. A year ago we were primarily direct and had about 80 customers; now we are seeing between 500 and 600 new customers per month," he says.

But for Greg Carlow, managing director of VAR Repton, there remains some channel conflict. "With EMC you never know whether it is going direct or indirect," he claims. "It's not as bad as some others, but it's definitely a problem."

BT Indirect Channels (BTIC) was formed nine years ago as part of BT's recognition that it needed to go beyond its existing direct business. Today it has 100 authorised partners - including 12 distributors - and 3,000 VARs. BTIC does not require partners to be certified, although this policy is under review.

BT refers to some of the partners as directly managed resellers, some of which are part of its Managing Accounts Through Partners Programme, which is the framework through which BT Business is transferring direct business through the channel.

So far this has occurred in two tranches: about £36m (or 4,000 accounts last year) and in July an announcement that £200m (or 36,000 accounts) will be transferred to the channel.

The way these accounts are being divided up is a closely guarded secret. BTIC's best-known data distributor is Azlan, which recently took on the whole portfolio, saying it was a recognition of BTIC's growing presence in the channel. BTIC estimates it will have a turnover of about £1bn this year.

BT's channel strategy has evolved to include the expected mix of training, marketing and co-marketing, and an extranet to manage incentives. The portfolio includes four areas: IT, voice products and solutions, broadband and mobility.

Four months ago it launched Fusion, an online incentive programme. Through Fusion partners can confirm online which incentives they are eligible for, find out how much they have earned and choose their rewards. This includes 'Marketing Zone', a single online point of reference, introduced earlier this year.

In addition, a web-based marketing tool, Campaign Creator, helps partners to access BT marketing campaigns and materials and modify them to meet their own requirements. It allows partners to create BT-branded material and adapt it to feature their own corporate identity and market information.

BTIC says it allocates marketing funds based on the return that can be generated from a particular campaign, and partner requests for funding are considered on a case-by-case basis. BTIC's route to market is tricky for outsiders to understand because of the wide range of products and the strength of its direct business.

One of the unique aspects is that in addition to distributors, partners and resellers it also has 'associates' who work under what are effectively outsourced sales management organisations.

An example of this is 3P in Cheltenham, a two-person business that manages 240 associates. Les Barwick, 3P's managing director, says it's like running the Football Championship (the renamed Division One), where ambitious associates have the chance to be promoted to 'Premiership' status to work directly with BTIC.

But he admits it's hard to compete on price. "With BT it's more about quality because you know there are often competitors that can come in at a lower price," he says.

CONTACTS

BT
www.bt.com/indirectchannels

EMC (0870) 608 7777
uk.emc.com/partnersalliances/

Hewlett-Packard (020) 7216 0059
www.hp.com/uk/PartnerOne

IBM (01256) 344 500
www-1.ibm.com/partnerworld

Microsoft (0870) 601 0100
www.microsoft.com/uk/partner/partnering/mpp/

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